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Frost Bank Tower Article

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Guest donaltopablo

Interesting article about how this tower was the tallest to begin construction after Sep 11 (probably doesn't still hold true). I'll try and find a rendering unless someone else already has one.

Tower changes more than skyline

Greg Gosdin

Special to the Austin Business Journal

Towering 514 feet at the corner of Fourth Street and Congress Avenue, it will be Austin's tallest building.

It also might broaden the office market landscape in more ways than one.

The Frost Bank Tower, set to be finished in November, might cause a dip in leasing rates, but the effect should be temporal, says Charles Heimsath, president and founder of Austin-based Capitol Market Research, a real estate analysis firm.

Heimsath says that the tower's addition of more than 500,000 square feet to the already more than 1 million square feet of vacant office space isn't as bad as it sounds.

"[The tower] can, in the long run, have a positive effect," he says. "We do have a soft market right now, so any additions [of office space] may have an effect on pricing, but it also frees up some of the existing desirable space downtown for immediate occupancy."

The analyst's opinion is this can be an opportunity for relocating downtown.

"Because it's already finished out, it makes it more affordable for some companies to move up," Heimsath says. He explains that tenants leasing flex space -- a mixture of office and warehouse space -- on the outskirts of the Central Business District may now be able to afford Class A space downtown because of the price dip.

He adds that the Frost Bank Tower is also a magnet for businesses that can afford Class A space.

"There certainly is an appeal to move into space that's never been occupied," Heimsath says. "It can be tailored to suit the needs of the firm moving in."

At the time of its groundbreaking on Nov. 27, 2001, Frost Bank Tower was the tallest project in the country to begin construction after the Sept. 11 attacks, according to the real estate investment firm Cousins Properties Inc., which manages the tower. Cousins executives declined to comment for this article.

Michael Kennedy, founder and president of Austin-based commercial real estate firm Commercial Texas Inc., concurs with Heimsath that the tower will add square feet to the market, but that the new space won't be driver on rental rates.

"It's not actual absorption," he says. "It's just musical chairs. Most of the tenants are coming out of other buildings downtown. For example, the Winstead law firm is presently at 100 Congress Avenue. They've pre-leased but won't actually move in until 2004. Their space [in the tower] is counted as being occupied."

According to both Heimsath and Kennedy, if the tower were to open without pre-leasing, the modern high rise might have added to Austin's glut. However, the Frost Bank Tower is 55 percent pre-leased, according to Cousins Properties.

This has the effect of adding space to downtown that is already considered occupied, keeping leasing rates at a fairly constant level, Kennedy and Heimsath say.

Frost National Bank of San Antonio has taken 52,000 square feet and will be the anchor tenant.

Other to-be tenants are Constructors and Associates Inc. and law firms Dewey Ballantine LLP, Graves Dougherty Hearon and Moody PC, Jenkins and Gilchrist PC, and Winstead Sechrest and Minick PC, according to Cousins Properties.

Kennedy adds that it's not simply the introduction of new office buildings that affects the office inventory, but what types of people step through those doors to fulfill leases.

"Office space absorption reflects white-collar job growth," he says. "We won't see an increase in leasing until there is an increase in white-collar jobs."

Kennedy says Frost Bank Tower should bolster Austin's image among companies that are looking for a place to take root.

"It changes the architectural dynamic for the city of Austin," he says. It's going to push other architects to get out of the 'Austin box'. [The tower] is shaped differently; it's forward-looking."

Kennedy explains that many of the buildings downtown are made of stone because architecture firms in the past were paying homage to the Capitol and other government buildings. Yet, the Frost Bank Tower shares exterior design elements with the Reuters Building in New York City.

Kennedy points out that the new attitude in design will take a while to "settle in," but, with plans for a new City Hall and a new 145,000-square-foot Austin Museum of Art next year, downtown is going to see some "great things" architecturally.

"The tower does open up architecture for a new way of thinking -- a new 'Austin look' that says something about who we are as a professional business community looking toward the future."

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I really like the design for the tower. I've never been to Austin, but it seems like it has a lot of potential downtown. The only thing I ask is that they build something where that surface lot in front of Frost Bank tower in the renderings is...or any of the surface lots I see for that matter.

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As a HUGE UT fan (I BLEED ORANGE! HOOK 'EM HORNS!), I go to nearly every football game of the season and I can tell you, Austin is an unbeleivable town. Theres an energy there unlike any other city in Texas. Austin is like no other - its unique, its everything but cookie-cutter. I was there only a few days ago for the K-State game (24-20 -- oh ya, BRING ON THE SOONERS!) and the Frost Bank Building looked so cool at night. I also noticed the Frost Bank logo lit up on top of the tower now. Its a pretty cool sight, and I would recommend visiting Austin ASAP!

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If school wasn't always in the way I would love to back to Austin and see this wonderful building and I also agree that this building should be higher than it is but it still is a great addition to any skyline